Uber Loses Bid to Keep Acquisition Report Secret From Waymo

Uber Technologies lost a battle to prevent Waymo from seeing an internal report the Alphabet Inc. unit is betting will show that its former engineer colluded with the ride-hailing giant to steal driverless technology.

The ruling by U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco may prove pivotal in a trade-secrets case headed to trial that could influence who wins the race to market self-driving cars. David A. Perlson, an attorney for Waymo, confirmed the ruling in a court hearing Wednesday.

Since Waymo sued in February, Uber and engineer Anthony Levandowski resisted turning over a due diligence report evaluating the risks associated with Uber’s acquisition of Otto, the company Levandowski formed days after he quit Waymo. They argued it can’t be disclosed because it involves confidential communications between attorneys and clients.

Waymo claims that in 2015, Levandowski and Uber hatched a plan for him to steal more than 14,000 proprietary files, including the designs for lidar technology that helps driverless cars see their surroundings. Levandowski left Waymo in January 2016. Uber bought Otto in August for $680 million.

Uber has denied Waymo’s trade-secret theft allegations and says its automation technology has been developed without significant input from Levandowski. The company fired Levandowski last month after a judge said the engineer should be threatened with termination for refusing to turn over evidence. Levandowski, who isn’t a defendant in the lawsuit, has declined to testify in the case, asserting his constitutional right against self-incrimination.

The due diligence report “likely contains information that is responsive to many of the questions Mr. Levandowski refused to answer,” Waymo argued in a court filing. “Indeed, the withheld report may be the only source of much of this information.”

Corley reviewed the report privately and told lawyers at a May 25 hearing that it’s important to the case. Waymo argued that because the report was produced by a cyber-security firm and not by lawyers, attorney confidentiality doesn’t apply. The company also contended the document doesn’t qualify for privacy protection because it may reveal fraudulent or criminal wrongdoing.

Uber can appeal Corley’s decision to U.S. District Judge William Alsup, who is overseeing the lawsuit. Alsup asked federal prosecutors to investigate Waymo’s claims after concluding the company made a “compelling” showing that Levandowski absconded with its files and that Uber “knew or should have known” Levandowski took the proprietary files from Waymo when it brought him aboard.

Uber spokesman Matt Kallman declined to comment on the ruling. A lawyer for the company said in court Wednesday that it will decide Thursday whether to appeal the decision.